Loading...
HomeMy WebLinkAboutMINUTES - 03081988 - 1.41 1-041 TO *ARD OF SUPERVISORS v FRW: DONALD L. BOUCHET, AUDITOR-CONTROLLER C=tra By: Kenneth J. Corcoran, Cx)sta Assistant Accounting Manager DATE* January 26, 1988 coily SUBJECT: WRITE-OFF OF DELINQUENT GENERAL ACCOUNTS RECEIVABLE SPECIFIC REQUEST(S) OR RECOWENDATION(S) & BACKGROUND AND JUSTIFICATION I. RECOMMENDED ACTION It is recommended that the Board of Supervisors authorize the write-off of delinquent accounts receivable in the amount of $13,437.70. This includes the months of July 'through December, 1987. II. FINANCIAL IMPACT In accordance with generally accepted accounting principles, the County 'maintains a Reserve for Bad Debt accounts. Delinquent and uncollectible accounts receivable are charged against this reserve account when they are written-off. As a result, there will be no financial impact on current year revenue if this write-off is authorized. 111 . REASONS FOR RECOMMENDATION Approval of the recommended action will allow approximately 240 delinquent accounts to be written-off and purged from the file of active accounts. This will reduce computer processing time and will allow more effort and concentration to be focusedon the collection of current accounts. The reasons for write-off recommendation can be summarized as follows: A. DETERMINED UNCOLLECTIBLE BY AUDITOR CONTROLLER $933.50 These are accounts where the Auditor-Controller has determined the accounts should be written-off. It has been determined that the cost of further collection efforts will exceed the revenues realized. B. DETERMINED UNCOLLECTIBLE BY ORIGINATING DEPARTMENT - $4,542.63 These are accounts where the County department which originated the billing has determined that the account should be written off. The main reason for this write-off recommendation is that the billing statements are undeliverable by the post office and efforts to identify the current location of the debtor are unsuccessful . CONTINUED ON ATTACHMENT' -W YES' SIGNATURE: A/ RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE ISI: ACTION OF BOARD ON 19RR =%PRROVED AS RECCMMENDED OTHER MAR VOTE OF SUPERV I SORS I HEREBY CERTIFY THAT THIS IS A TRUE _X UNAN I PAWS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES'. NOES' AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED MAR 8 1988 r CC' County Administator Auditor-Controller PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY --,DEPUTY M382/7-83 1 s -2- T64 BOARD OF SUPERVISORS SUBJECT: Write-off of Delinquent General Accounts Receivable C. DETERMINED TO BE IN THE COUNTY'S BEST INTEREST - $1 ,091 .34 These are accounts where it has been determined (primarily by County Counsel ) not to be in the County's best interest to pursue. D. BANKRUPTCY - $1 ,276.51 These are accounts where an order from the bankruptcy court requires the County to write-off the account. E. DETERMINED UNCOLLECTIBLE BY COLLECTION AGENCY - $4,688.31 These are accounts where the County's outside collection agency has returned them as uncollectible. This recommendation by the collection agency is for various reasons, the most common including that the debtor has "skipped" or has filed bankruptcy. F. STATUE OF LIMITATION - $741 .73 These are accounts which were taken to Small Claims Court for judgment. By law, the small claims judgments expire after a 10 year period. G. SMALL CLAIMS JUDGMENT IN FAVOR OF DEFENDANT - $120.00 These are accounts where the County has taken the debtor ,to Small Claims Court, and all , or a portion of, the account has been ruled in favor of the defendant. H. BALANCE $10.00 OR LESS - $43.68 Delinquent accounts with balances of $10.00 or less are recommended for write-off because further collection efforts cannot be justified on a cost-benefit analysis. This also includes accounts with credit balances of $10 or less, which have been written-off rather than refunded due to cost and inability to locate. IV. BACKGROUND Many County departments request the Auditor's Office to bill for services they have provided. This billing is accomplished through the- General Accounts Receivable system. After three invoices have been sent out with no response, additional collection efforts including court action . and assignment to a collection agencyr. are initiated. For the reasons noted in Section III, it is periodically necessary to formally write- off certain accounts. Historically, authorization to write-off these accounts has been done either quarterly or semi-annually. It should be noted that the Board' s authorization to write-off accounts only relieves the department originating the claim from further collection efforts. The Board's action does not relieve the delinquent debtor from responsibility for the debt. Therefore, the account may be reinstated at any time if conditions with the debtor change. V. CONSEQUENCES OF NEGATIVE ACTION If the recommended action is not taken there will be a slight increase in monthly General Accounts Receivable processing costs. Also, leaving these accounts on the file will cause some decrease in clerical efficiency. ' I,